Cable programmers are pouring more resources into emerging
channels—which often serve up variations on the same fare offered by the
flagship brands—as a way to protect their mature networks from rivals and
grow revenue.

Take the Cooking Channel, started by Food Network owner
Scripps Networks Interactive a little more than three years ago. Michael Smith,
general manager of Cooking Channel, says Scripps' recipe was part offensive and
part defensive. "We saw demand for food programming growing
dramatically," Smith says. At the same time competitors' appetites were
being whetted because Fox and Bravo were showing that cooking shows could draw
viewers for them as well. "By creating a second channel of our own we
could blunt that activity."

The proof is in the pudding. In its first year, Cooking
Channel's ratings doubled Fine Living's. Last year, revenues were up 34% to $89
million in 2012. Scripps has pursued a similar blueprint when it launched the
DIY Network to buttress HGTV. Both new networks programmed how-to programming
as the more mature networks went for more entertainment value.

Metastatic Momentum

Scripps isn't alone pursuing this strategy. Last year, A+E
Networks rebranded its History International channel as H2. Ratings in the
25-to-54 year old demo were up 38% last year and are pacing up 34% so far this
year. A+E also recently hired BBC executive Jana Bennett as president of its
emerging Bio and LMN networks to strengthen A&E and Lifetime. Given their
position relative to the "quarterbacks" on the field, some call these
new ventures "flankers."

"The real growth opportunity from an affiliate and a
revenue standpoint is definitely from these emerging networks," said Dirk
Hoogstra, executive VP and general manager for History and H2.

Discovery Communications sees Science Channel as a growth
engine. GM Deb Myers says that since 2008, ratings have risen for 18 straight
quarters, distribution is expected to hit 80 million homes, up from 54 million,
and ad sales have tripled.

The network has taken Discovery Channel's core science mission
and added some pop culture. It will be the home for the company's first
scripted show, 73 Seconds, The Challenger Investigation, starring
William Hurt as physicist Richard Feynman. The show will be simulcast on
Discovery.

"When we want to attract a bigger audience, we will
either give a window to Discovery or we will simulcast," Myers says.
"It works the other way too," she added, noting that MythBusters
will be airing on Science.

More Than Copycats

Cable programmers have been launching related channels for a
long time. There are a nest of ESPN Networks. VH1 was originally a grown-up
version of MTV and now both brands come in a variety of flavors. There are also
the movie channel spinoffs from Lifetime and Hallmark, which, according to
Derek Baine, analyst at SNL Kagan, which were built on programming synergies,
but now do original programming.

"I think more interesting is what Scripps is doing with
Cooking and DIY," says Baine. "Cooking is really testing new shows .
. . and if they are very successful they can be ported over to the bigger Food
Network."

DIY and Cooking are doing "pretty well" with
advertising front and have gotten a good reception from operators. "I
think there is a place for these networks, but they have to be priced very
low," he says.

But original programming, the key ingredient making the
networks grow, is expensive. According to Kagan, programming expenses rose 15%
from 2012 to 2011 at the Cooking Channel. At DIY, programming costs rose 9%. H2
recorded a 12.5% increase at H2.

Those investments in programming seem to be paying off. In
addition to the big gains Cooking Channel, net operating revenue rose 18.1% at
DIY 21.2% at H2, and 13.1% at Science, according to Kagan.

The investment helps at time when distributors are questioning
carrying some little-watched channels.

"Operators are definitely looking for networks to
justify their value," says Smith. "One of the things we're proud of
at Cooking Channel is we do produce hundreds of hours of original
programming."

Each flanker network looks to distinguish itself from its
mother ship. Cooking aims to have a more independent flavor while stocking up
on genres no longer popular on Food Network, such as in-studio instructional
shows that are cheap to make. (About 30% of Cooking Channel viewers don't watch
Food, Smith said.) Cooking recently launched The Freshman Class,
focusing on people trying to turn their lives around by going back to cooking
school. The network also airs reruns of shows from Food, such as Iron Chef
America and Good Eats. At the same time, some series, like Hungry
Girl and Heatseekers, move from Cooking to Food.)

Similarly, Hoogstra says that History is "entertainment focused with the
history baked in," while H2 is more geared to pleasing viewers seeking
information.

Coming up on H2 next year is The World Wars, from the
producers who did Men Who Built America for History. It will focus on
how World War II affected the people who became leaders during that time.
"It will be a really high-quality production," Hoogstra says.

How big can a flanker like H2 get? "I see
potential to continue to grow. Where it maxes out I don't know," Hoogstra
says. "I don't know what the ceiling is yet. But we will find it. We're
going to push and push and see how high we can take it."